LONDON , England -LRB- CNN -RRB- -- British Airways said Tuesday it was in talks with Australian rival Qantas that could see a merger of two of the world 's most prestigious airlines .

BA says it is in talks with Australian rival Qantas .

London-based BA said the exploratory talks would look at creating a dual-listed company but offered no other details .

`` There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course if appropriate , '' BA said in a statement .

BA said the talks would not affect its negotiations in Spanish airline Iberia , with which it is already discussing a revenue deal with American Airlines .

Shares in BA leapt more than 10 percent on the news , soaring 154 pence -LRB- $ 2.32 -RRB- within an hour .

Both Qantas -- known as the `` Flying Kangaroo '' airline -- and BA are partners in the Oneworld Global Alliance , an umbrella which links 10 of the world 's carriers , including American Airlines and Cathay Pacific .

Tuesday 's announcement comes after the Australian government revealed that it plans to increase the level of foreign ownership permitted in Qantas , the Sydney Morning Herald reported .

BA sold a remaining 18.25 percent stake in Qantas in 2004 , according to the Herald .

The deal , which will not permit a takeover , revises current Australian law that currently limits a single foreign holding to 25 percent and a group maximum of 35 percent .

BA , American Airways and Iberia in August opened negotiations over a revenue deal , filing for antitrust immunity for the tie-up . The deal has been bitterly opposed by Richard Branson 's Virgin Atlantic Airways .

CNN aviation correspondent Richard Quest said BA 's twin merger situation was unprecedented in the aviation industry .

BA and Qantas have for many years co-operated on the so-called `` Kangaroo Route '' including sharing revenues on UK-Australia routes , Quest said . A merger would make a powerful airline that would literally span the globe , he said

The merger moves come during troubled times for BA , which saw its pretax profits fall by 92 percent in the first half of this year , a loss it blamed on high oil prices and troubled financial markets .

Qantas has also faced its own troubles this year after one of its jetliners was damaged by a midair explosion over the South China Sea in July , forcing it to make an emergency landing .

The airline also announced it was slashing its work force by 1,500 people worldwide , abandoning plans to hire 1,200 more as high fuel costs squeezed profits .

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British Airways confirms it is in merger talks with Australian rival Qantas

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BA says it is looking at possible dual-listed company structure

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Airline says it is continuing talks with Iberia